13/12_chap7

One common way to compute estimate at completion (EAC) is to take the budget at completion (BAC) and:

• Divide by SPI.

• Multiply by SPI.

• Multiply by CPI.

• Divide by CPI.

The finance department requires that you keep them updated on the costs being spent on the capital project you are leading. You were required to submit a funding plan, and monthly forecasts are necessary so that any changes to the funding plan can be requested in advance and evaluated. Exceeding the budget limit is unacceptable as it will impact the stock value. You have successfully implemented processes and practices to anticipate funding changes, and you evaluate them to minimize problems and increase the efficient use of funds. You have employed a variety of reporting and analysis techniques to meet the finance department requirements. One of them is EAC, which is a periodic evaluation of:

• The cost of work completed

• The value of work performed

• The anticipated total cost at project completion

• What it will cost to finish the project

If earned value (EV) = 350, actual cost (AC) = 400, and planned value (PV) = 325, what is the cost variance (CV)?

• 350

• -75

• 400

• -50

The customer responsible for overseeing your project asks you to provide a written cost estimate that is 30 percent higher than your estimate of the project's cost. He explains that the budgeting process requires managers to estimate pessimistically to ensure enough money is allocated for projects. What is the best way to handle this?

• Add the 30 percent as a lump sum contingency fund to handle project risks.

• Add the 30 percent to your cost estimate by spreading it evenly across all project activities.

• Create one cost baseline for budget allocation and a second one for the actual project management plan.

• Ask for information on risks that would cause your estimate to be too low.

You've recently been assigned to manage a marketing project to brand a sustainable development program. Even though you are just starting your efforts, the sponsors are concerned about the likelihood of reaching planned milestones during the project. They are wondering how you will go about estimating. Analogous estimating:

• Uses bottom-up estimating techniques

• Is used most frequently during project executing

• Uses top-down estimating techniques

• Calculates estimates using actual detailed historical costs

Management has asked you to update the projected cost of running your agile team through the end of the project based on the latest project data. What information will you need from the team to update this estimate?

• Resource management plan

• Release plans

• Burndown graph

• Product backlog

You have been working with the subject matter experts to estimate the activity durations and costs on the project. All the following are outputs of the Estimate Costs process except:

• An understanding of the cost risk in the work that has been estimated

• The prevention of inappropriate changes from being included in the cost baseline

• An indication of the range of possible costs for the project

• Documentation of any assumptions made during the Estimate Costs process

During the course of your hybrid project, changes and additions have gradually moved the total project scope upward. The original scope was 400 story points, but at this point the total project scope is 620 story points. The team's average velocity has stabilized at 20 story points per iteration, and they have already completed 120 story points worth of scope. The team's burn rate is $16,000 per week. The original cost estimate for the team was $256,000, based on the initial scope and the team's initial velocity estimate of 25 story points per iteration. What is the remaining cost of running the team on this project?

• $496,000

• $400,000

• $320,000

• $200,000

You're managing a project to develop a new mobile application for the inventory tracking and-control system of a restaurant franchise organization. Schedule is the highest-priority constraint for the leadership team, but the franchise owners are most concerned about cost and the quality of the application. If there are bugs and errors in the system, they will pay higher costs on waste or lost sales. But investing a lot of effort into delivering great functionality could be expensive. It was decided that an adaptive approach to the project life cycle would likely be the best way to balance the competing priorities and deliver a working, cost-effective application. The franchise decision team has been meeting with the development team. The groups feel good about the project's progress, but they are hearing concerns from other stakeholders about what the impact will be to the bottom line and whether the system will be ready for launch. These concerns were anticipated in planning, and will be managed with cost performance measurement. Cost performance measurement is best done through which of the following?

• Asking for a percent complete from each team member and reporting that in the monthly progress report

• Calculating earned value, and using indexes and other calculations to report past performance and forecast future performance

• Using the 50/50 rule, and making sure the life cycle cost is less than the project cost

• Focusing on the amount expended last month and what will be expended the following month

A cost performance index (CPI) of 0.89 means:

• At this time, we expect the total project to cost 89 percent more than planned.

• When the project is completed, we will have spent 89 percent more than planned.

• The project is progressing at 89 percent of the rate planned.

• The project is getting 89 cents out of every dollar invested.